Business Week reports that the disparity between the “shop floor and the executive suite” is at an all-time high. In 1980, CEOs made 42 times the average blue-collar worker. By 1990, this disparity rose to 85 times, and by the year 2000 the disparity between worker and CEO climbed to 531 times as much.

A report by the San Francisco Chronicle in June of this year found that although corporate earnings in the Bay Area and Silicon Valley declined, top executives “enjoyed huge pay increases last year.” The Chronicle found that 325 executives from 59 companies received an average of $13.3 million during fiscal 2000 in salaries, bonuses, and option grants. A total of 88 CEOs received at least $10 million in total compensation. And keep in mind that thousands of workers in many Bay Area companies were laid off due to poor company performance.

The argument that CEOs deserve huge compensation due to good performance and high corporate earnings is bogus. A study conducted by United for a Fair Economy (UFE) found that CEO compensation bears little resemblance to performance. According to the latest survey of the 365 largest U.S. corporations, CEO compensation skyrocketed despite often poor company performance.

Rather than performance rated, CEO pay is a corrupt club of extreme arrogance where CEOs sit on each other’s board of directors, and then approve each other’s compensation. The corporate world is totalitarian with the people at the top making all the rules, especially for themselves. Even Alan Greenspan criticized the level of CEO pay before a Congressional committee.

CEO pay is not only outrageous, it is exacerbating the huge income gap in this country. The latest Census Bureau data show that only 1 percent of the population has as much after-tax dollars as the poorest 100 million Americans combined. At the same time the Census Bureau found poverty among American children at 19 percent, exceeding the rates of the 1970s.

The Economic Policy Institute reports that between 1977 and 1999, the top 20 percent of American households increased their annual after-tax income by 43 percent. The middle 20 percent of households increased only 8 percent, and the bottom 20 percent lost 9 percent. The top 1 percent of households gained 115 percent.

This growing disparity in wealth is poison to democracy. Aristotle understood this over 2000 years ago when he wrote that democracy cannot function if there are extremes of wealth. U.S. Supreme Court Justice Louis Brandeis understood this problem when wrote,“You can have wealth concentrated in the hands of a few, or democracy. But you cannot have both.” The wealth gap has become so extreme that we have moved from a democracy to a plutocracy where the rich and powerful corporations rule, including buying our politicians and then having them write the laws.

This corrupt process is evident in the tax cut legislation of President Bush and passed by congress. Nearly 40 percent of the tax returns go to the richest 1 percent of Americans. This demonstrates how far we have fallen from the economic justice envisioned by Franklin D. Roosevelt: “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.

Representative Martin Sabo (D-MN) has a plan to stop adding to the wealth abundance of CEOs. Representative Sabo introduced a bill that would cap the tax deductibility of CEO compensation to 25 times the amount paid to the lowest full-time worker in any firm. Such legislation may be a small step in the struggle to achieve economic justice and real democracy, but is an important step that we should all support.

Douglas Mattern is the president of the Association of World Citizens, a San Francisco based international peace organization with World Citizen Centers established in 50 countries. He is also a long-time Silicon Vallen senior engineer.

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